Buy hot funds, okay?
Whether to buy a hot fund is good or not depends on people. Different investors have different strategies to buy hot funds, so the final profit and loss results are different. Generally speaking, the valuation of popular funds will generally be higher when they are discovered by everyone, so the risk of buying at this time is relatively large, which is a very test for investors to judge trading opportunities. As the saying goes, "When the fund is overvalued, it will start to retreat. Therefore, it is necessary to stop profit and sell in time before the fund retreats, and most investors can't grasp this selling point, which leads to a significant decrease in profits or even losses in the later period.
Why not recommend buying hot funds?
The reason why the fund becomes a hot fund is mainly because of its high income, and the investment income of the fund is positively related to the risk. The higher the fund income, the higher the corresponding investment risk, most of which are high-risk funds such as stocks, indexes and hybrids. Funds that have been popular and ranked in the top few of the same type of funds indicate that their net worth is already quite high at this time, and it is difficult for ordinary investors to grasp the trading point and are easily trapped, so it is not recommended for novices or to buy popular funds.
If you want to buy a popular fund, you must have a certain understanding of the fund. If you are a novice investor, it is not recommended to buy hot funds, because the risk of hot funds is usually greater than that of ordinary funds. Different types of funds have different risks. When investors buy funds, they still need to buy according to their risk tolerance.